Employment time and the cyclicality of earnings growth

• 成果类型: Article
• 署名作者: Hoffmann, Eran B.; Malacrino, Davide
• 署名单位: Hebrew University of Jerusalem; International Monetary Fund
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2018.09.009
• 发表日期: 2019
• 页码: 160-171
• 关键词: employment; labor earnings; business cycles; distribution

摘要

We study how the distribution of earnings growth evolves over the business cycle in Italy. We distinguish between two sources of annual earnings growth: changes in employment time (number of weeks of employment within a year) and changes in weekly earnings. Changes in employment time generate the tails of the earnings growth distribution, and account for its procyclical skewness. In contrast, the distribution of weekly earnings growth is close to symmetric and stable over the cycle. This suggests that studies of earnings risk should carefully model the employment margin to avoid erroneous conclusions on the nature and magnitude of risks underlying individual earnings. We show that the combination of simple employment and wage processes is enough to capture the complex features of the earnings growth distribution. (C) 2018 Published by Elsevier B.V.